Megaupload’s Kim Dotcom granted bail, barred from Internet

Megaupload founder Kim Dotcom was freed on bail in New Zealand, pending an …

AUCKLAND, New Zealand—File-sharing magnate Kim Dotcom was granted bail Wednesday morning New Zealand time, after the judge hearing his application ruled that the Megaupload founder has no access to funds to help him flee the country.

As part of the bail conditions, Dotcom must reside at his leased Coatesville, Auckland mansion. He cannot travel more than 80 kilometers, or 50 miles, from the Coatesville residence on which no helicopters are allowed. Earlier bail applications by Dotcom failed as he was thought to have access to helicopters and chartered private jet planes with which he could flee New Zealand.

Dotcom, who changed his last name to fit his outsize personality and online persona, is also banned from using the Internet.

Lawyers acting for the US government opposed the bail application, and claimed Dotcom has access to financial resources that make him a flight risk. However, Justice Dawson said in the North Shore District Court that as time had passed, authorities had not been able to show that Dotcom has further assets hidden, and the mere suspicion that he is very wealthy cannot be used against him.

Instead, Justice Dawson says Dotcom has “every reason to stay to be with his family and fight to keep his assets.” Justice Dawson also noted that while Dotcom has Finnish and German passports both those countries have treaties with the US that would allow for prosecution should he flee to either place.

Dotcom, who as jailed on January 20, has had his bank accounts seized, as well as his cars and the entire Coatesville mansion that he lived in. Police have allowed Dotcom’s pregnant wife Mona and three children to live in the mansion, however.

The lawyers acting for the US government wanted to ban Dotcom from using the Internet. Dotcom’s lawyer said the condition isn’t realistic, saying the Megaupload founder needs to contact his legal team in the US. to prepare his case. Justice Dawson sided with the US government, and said Dotcom shouldn’t have Internet access as he has "the ability to use it for wrong purposes."

Dotcom is wanted by the US Justice Department, which accuses him and six Megaupload associates of copyright infringement to the tune of $500 million. US authorities are seeking to extradite Dotcom to Virginia to face trial on criminal conspiracy charges. He was arrested with four other Megaupload associates in a dawn raid by a large SWAT-style police force supported by two helicopters in January.

His associates, Bram van der Kolk, Finn Batato and Mathias Ortmann, won bail previously. All four now await a hearing to decide if they are to be extradited to the United States.

131 Reader Comments

Barring Kim from the internet is silly, he's not an elite hacker like Kevin Mitnick. This just goes to show how totally out to lunch the court system is about Internet related issues. They need to train these people on the current state of technology so that they can have some perspective on this.

Kim Dotcom is a scumbag who profited from something that should have been free. That being said, it's utterly crazy that we're treating him as though he's some sort of mafia crime boss wanted for mass murder. He's just a douchebag who made money by selling stuff that didn't belong to him. Let the punishment fit the crime. This sorta reminds me of when 10-year-olds were being sued for $10,000 for downloading MP3's....

How much you wanna bet this guy wouldn't be getting nearly this much attention if he had defrauded a few individuals or small businesses instead of these powerful corporations? Dotcom merits no sympathy, but it really does bother me that these laws carrying hefty prison sentences were bought and paid for by industry lobbyists. It's so utterly hypocritical.

What also bugs me is that this guy really isn't in trouble so much for profiting from piracy, but for facilitating it. This groups him in with people like TPB and others who do it not for selfish greed but because they genuinely believe that IP has gone too far and that information should be able to flow freely across the internet. Kim Dotcom is scum because he profited from other people sharing content. He did it for his own personal greed and thus makes him no better than these sleazy corporations. It just bothers me that principled copyleft advocates are getting grouped in with this fat slimeball.

Is it even possible to ban someone from using the Internet? LOL What about your local Internet cafe, if he has no internet connection at home. Why don't they have a cop watching him 24/7?

yeah, just forbid them from touching any networked computer, same as they did with Mitnick (except there wasn't wireless back then, so now they'll also have to ban smartphones and anything with wireless)

What's the logic (aside from making life difficult) for banning Kim Dotcom from the internet? He's not accused of hacking, or child pornography, or Nigerian-style cons, just commercial copyright infringement -- what is he supposed to do that would give the judge reasonable grounds for concern, besides a vague "something wrong on the internet"?

As I predicted in another forum, the USG won't find the NZ government as easy to push over as the corrupt and craven UK and Australian governments have been.

Although I fully expect a plethora of diplomatic incentives are on the table, it sounds like NZ's judicial system is actually acting reasonably impartially. This is one of the reasons NZ places so highly on anti-corruption indices.

Finally, I predict that the next step of the US government's action here will be to try and link Kim Dotcom and MegaUpLoad with terrorism and or child abuse. They'll do this thinking it will bring the NZ public "onboard", as it would in the US. It will be seen for what it is, and will actually cement public opposition to the extradition.

Oh, and for the record, I am Australian, not from NZ. But I do a lot of work there, and find it's governance and anti-corruption culture to be very impressive.

As I predicted in another forum, the USG won't find the NZ government as easy to push over as the corrupt and craven UK and Australian governments have been.

Although I fully expect a plethora of diplomatic incentives are on the table, it sounds like NZ's judicial system is actually acting reasonably impartially. This is one of the reasons NZ places so highly on anti-corruption indices.

Finally, I predict that the next step of the US government's action here will be to try and link Kim Dotcom and MegaUpLoad with terrorism and or child abuse. They'll do this thinking it will bring the NZ public "onboard", as it would in the US. It will be seen for what it is, and will actually cement public opposition to the extradition.

Oh, and for the record, I am Australian, not from NZ. But I do a lot of work there, and find it's governance and anti-corruption culture to be very impressive.

I'm from neither, but now I'm pleasantly curious about NZ's anti-corruption culture. Please share more if you're able...

AFinally, I predict that the next step of the US government's action here will be to try and link Kim Dotcom and MegaUpLoad with terrorism and or child abuse.

The US has already done that with the "Mega conspiracy" accusing them of money laundering. Throughout the indictment the term "conspiracy" is used for a reason. One of the most nonsensical charges was money laundering that consisted of $185k transfer - which was used to buy their promo ads that UMG and RIAA didn't like.

If Dotcom is extradicted to the US I find it hard to believe he'd get a fair trial with the way this has been exagerated and the chilling effect this case has had on US economics.

MegaUpload didn't cause the global financial disaster. So why are they getting bonuses and walking around like fat cats and Dotcom gets the book (and SWAT teams) thrown at him? Nothing in Dotcom's past indicates he was violent.

The problem with the whole "anti-corruption" thing is that this guy is a pretty awful person who really does deserve to be extradited for his criminal activities.

Guilty until proven innocent. Even if he is cleared of all the charges (and some are insane) his business is gone.

There was no uptick in iTune (or any other online retailer) after MegaUpload went down. That sure doesn't seem like that much "stealing" (really "infringment") was going on at the scale the US claims.

Imagine if Google, YouTube, Facebook or most other webservices had to develop under the same conditions being applied to Dotcom. All of them had entanglements with the entertainment industry over copyrights - but no SWAT teams surprised tthem and they weren't charged with criminal indictments. Instead their business' were allowed to mature and develop new ways of handling user submitted material.

Dotcom did have a reputable service representing them in the US for DCMA notices. No the files were not removed (a catch 22 the way it's worded) because sometimes there is a mistake - for example ordering take-downs of Mega's promo videos.

There was a payment plain for downloads which also helped pay software developers and independent musician's (mainly hip-hop and house). How big was the legal files percentage? I guess we'll never know because all they are interested in is destroying a business that was able to make money doing something hollywood says it can't. Everyone else can go to _ _ _ _ (fill in your own word).

That's how the customer and artist is treated too. Bands pay for promo, tours, etc. So what does hollywood do but distribute - sorta like Mega was doing. Making money off someone else's work.

Meanwhile I'm terrified the only content I'll have access to is the crap hollywood puts out. UGH.

Yea, Dotcom was colorful and chances are not very charismatic. That doesn't make a criminal though. And it does hurt the US economy far more than any so-called "lost sales" from crap that hollywood puts out.

Barring Kim from the internet is silly, he's not an elite hacker like Kevin Mitnick. This just goes to show how totally out to lunch the court system is about Internet related issues. They need to train these people on the current state of technology so that they can have some perspective on this.

Maybe not an "elite" hacker, but this is not the first time Kim AKA "Kimble" has been in trouble, and he has no problems finding ways to misuse the internet:

As I predicted in another forum, the USG won't find the NZ government as easy to push over as the corrupt and craven UK and Australian governments have been.

Although I fully expect a plethora of diplomatic incentives are on the table, it sounds like NZ's judicial system is actually acting reasonably impartially. This is one of the reasons NZ places so highly on anti-corruption indices.

Finally, I predict that the next step of the US government's action here will be to try and link Kim Dotcom and MegaUpLoad with terrorism and or child abuse. They'll do this thinking it will bring the NZ public "onboard", as it would in the US. It will be seen for what it is, and will actually cement public opposition to the extradition.

Oh, and for the record, I am Australian, not from NZ. But I do a lot of work there, and find it's governance and anti-corruption culture to be very impressive.

I'm from neither, but now I'm pleasantly curious about NZ's anti-corruption culture. Please share more if you're able...

NZ isn't corrupt because there just isn't anything of worth to actually bribe any politicians for. It wasn't too long ago when taking a politician's wife for a holiday during official business would make front page with public baying for his blood.

If I were banned from the internet, I would have trouble paying my bills. I don't even have a checkbook. I wouldn't even know how much to pay, since I rarely get a paper bill anymore. Banning from the internet is pretty stupid, and going to become even more so. Regardless of the guy's guilt or innocence, it's not like he's going to unleash the ultimate virus, or call out his underlings to take down the U.S. government.

@lanf123 - If you read the indictment document, you will see references to 'terrorist propaganda' and 'child pornography', so yeah, US government has already pulled that one :) And no, I am not kidding.

Prosecution had same concerns (in regards to 'internet access') for other defendants that were released on bail. It's as if they can magically restart a business that requires thousands of servers and millions of dollars per month to run, without having thousands of servers and millions of dollars.

I was shocked with prosecution's claims that "Kim is wealthy, and has access to resources" bold statements, though. They, literally, looked like legal system in USSR in eighties, where you'd have to prove that you are not guilty, and not the other way around. Luckily, seems like common sense prevailed, and judge simply rejected such claims. What would be next? Prosecution claiming that I am up to something, and me having to prove that I am not?

And now I would really like someone to subpoena YouTube, in order to find out what percentage of YouTube users are uploading files, as opposed to those that are only using the service without ever uploading (this is one of the latest jewels from prosecution). Everyone I know (and bothered asking, heh), except one person, has a YoutTube account but has never uploaded a single file. YouTube must be up to something, too ;)

Kim Dotcom is a scumbag who profited from something that should have been free.

What are you saying should be free? Software, music, movies? Stuff that you like that other people work hard on? I think food should be free, doesn't mean it makes economic sense to declare it so to meet my whims and desires. Children also think everything should be free.

...This groups him in with people like TPB and others who do it not for selfish greed but because they genuinely believe that IP has gone too far and that information should be able to flow freely across the internet.

How much you wanna bet this guy wouldn't be getting nearly this much attention if he had defrauded a few individuals or small businesses instead of these powerful corporations? Dotcom merits no sympathy, but it really does bother me that these laws carrying hefty prison sentences were bought and paid for by industry lobbyists. It's so utterly hypocritical.

He wouldn't have gotten this much attention if he had murdered someone. Most likely he'll be in more trouble too.

AFinally, I predict that the next step of the US government's action here will be to try and link Kim Dotcom and MegaUpLoad with terrorism and or child abuse.

The US has already done that with the "Mega conspiracy" accusing them of money laundering. Throughout the indictment the term "conspiracy" is used for a reason. One of the most nonsensical charges was money laundering that consisted of $185k transfer - which was used to buy their promo ads that UMG and RIAA didn't like.

If Dotcom is extradicted to the US I find it hard to believe he'd get a fair trial with the way this has been exagerated and the chilling effect this case has had on US economics.

MegaUpload didn't cause the global financial disaster. So why are they getting bonuses and walking around like fat cats and Dotcom gets the book (and SWAT teams) thrown at him? Nothing in Dotcom's past indicates he was violent.

Does going "well they're doing something worse!" really make a good court defense? Something tells me it wouldn't get you very far in any justice system.

There was no uptick in iTune (or any other online retailer) after MegaUpload went down. That sure doesn't seem like that much "stealing" (really "infringment") was going on at the scale the US claims.

No, but there was a noticeable drop in general net traffic. And i am sure big media will spin that for all it is worth...

They'd probably spin anything, but I've read that while there was a significant drop when this happened, things more or less returned to normal levels of traffic very quickly, with the primary difference being that filehosts stopped using US servers, so US-Europe lines became congested.

AdamM wrote:

Does going "well they're doing something worse!" really make a good court defense? Something tells me it wouldn't get you very far in any justice system.

It's not a court defense, but it is a condemnation of our priorities and the fairness of our legal system.

...This groups him in with people like TPB and others who do it not for selfish greed but because they genuinely believe that IP has gone too far and that information should be able to flow freely across the internet.

That number has no factual basis. They posted a number that was pulled out of thin air. They don't even have evidence where he got the alleged money. Troll harder Jeff.

superslav223 wrote:

What are you saying should be free? Software, music, movies? Stuff that you like that other people work hard on? I think food should be free, doesn't mean it makes economic sense to declare it so to meet my whims and desires. Children also think everything should be free.

Ah, the logical fallacy of "I worked hard on this, I should be paid". Hard work does not in itself merit compensation. What counts is if the work is something people are willing to pay for. If it's worth paying for, then you should be paid. The market could care less how hard you worked.

All art is derived from the public domain in one way or another. It can't be avoided. Thus artists are making money by claiming ownership of public property. What if what if freight companies claimed ownership of the roads because they were used to deliver cargo? Would that be right? No one can own, thus cannot sell, public property because people would just bypass it by going straight to the public channels. Secondly, it's a non-exclusive and non-rivalrous good. That means everyone can have it and having it doesn't deprive anyone else from having it either. Therefore, by the laws of economics, content should be free. You want to get paid? Charge people for your labor, (like a consultant or a network administrator) that's the only thing that's really yours to sell. Art is a service industry. Learn it, know it.

What's wrong with children thinking everything should be free? Maybe they're right and the monetary economic system is wrong? It's not hard to realize that every other species on this planet doesn't use currency for the necessities of life. We are the only species that pays to live here (As if we're renting it from someone else!). It would be great if food, shelter, health care, and education could be provided without cost to anyone. It would take technology to solve that problem, but we won't ever see it because such technology would pull the rug from under anyone trying to profit from those things. So many things that would serve the common good go untouched because it would destroy profitability of an industry (e.g. solar vs. fossil fuels) or it could only be done at a loss.

IMO, the bar for extradition should be pretty high, like someone who has committed multiple murders or ran a human trafficking ring.

Wait, what? So if I kill one person and escape across the national boundary there should be no extradition process? Is life that meaningless to you?

And why should the bar be that high? Would you want a bunch of criminals hiding out in the US who had only commited what apparently are 'minor' crimes according to you, such as rape, fraud and murder as your friends and neighbors because they didn't meet your very very high bar?

Ah, the logical fallacy of "I worked hard on this, I should be paid". Hard work does not in itself merit compensation. What counts is if the work is something people are willing to pay for. If it's worth paying for, then you should be paid. The market could care less how hard you worked.

Ahhhh the fallacy of a strawman. He did not claim that he should be paid. He claimed that others do not have a right to his work. There is a pretty important distinction there. Yes, as a potential consumer you have the right not to meet his asking price. As a producer of such content, he has the right to decline to sell you the fruits of his creativity for the price you are willing to pay. What you do not have the right to do is take it anyway.

Copyright does not protect an economic model. It protects a distribution model. Some use it to make money(commercial distribution). Others use it to protect how a product is distributed(GPL). Profit is never guaranteed or even protected.

Ah, the logical fallacy of "I worked hard on this, I should be paid". Hard work does not in itself merit compensation. What counts is if the work is something people are willing to pay for. If it's worth paying for, then you should be paid. The market could care less how hard you worked.

Ahhhh the fallacy of a strawman. He did not claim that he should be paid. He claimed that others do not have a right to his work. There is a pretty important distinction there. Yes, as a potential consumer you have the right not to meet his asking price. As a producer of such content, he has the right to decline to sell you the fruits of his creativity for the price you are willing to pay. What you do not have the right to do is take it anyway.

Copyright does not protect an economic model. It protects a distribution model. Some use it to make money(commercial distribution). Others use it to protect how a product is distributed(GPL). Profit is never guaranteed or even protected.

What's wrong with children thinking everything should be free? Maybe they're right and the monetary economic system is wrong? It's not hard to realize that every other species on this planet doesn't use currency for the necessities of life. We are the only species that pays to live here (As if we're renting it from someone else!). It would be great if food, shelter, health care, and education could be provided without cost to anyone. It would take technology to solve that problem, but we won't ever see it because such technology would pull the rug from under anyone trying to profit from those things. So many things that would serve the common good go untouched because it would destroy profitability of an industry (e.g. solar vs. fossil fuels) or it could only be done at a loss.

Are you a communist?.I'm not trying to smear you or anything, but I don't know how else to describe this philosophy of yours.